This is a list of terms found in car insurance.. It
is not meant to be all inclusive, but should help with your
understanding of the terms.
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An
amount equivalent to the fair market value of the stolen or damaged
property immediately preceding the loss. For real property, this
amount can be based on a determination of the fair market value of
the property before and after the loss. For vehicles, this
amount can be determined by local area private party sales and
dealer quotations for comparable vehicles.
An
insurance company authorized to do business in California.
A licensed person or
organization authorized to sell insurance by or on behalf of an
insurance company.
Coverage for the insured in the event that
the insured's negligent acts and/or omissions result in losses in
connection with the use, ownership, or maintenance of aircraft.
Coverage on the risks associated with driving or
owning an automobile. It can include collision, liability,
comprehensive, medical, and uninsured motorist coverages.
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A temporary or
preliminary agreement which provides coverage until a policy can be
written or delivered.
Any physical
injury to a person. The purpose of liability insurance is to
cover bodily injury to a third party resulting from the negligent or
intentional acts of an insured.
Covers losses resulting from the
malfunction of boilers and machinery. This coverage is usually
excluded from property insurance creating the need for this separate
product.
A licensed person or
organization paid by you to look for insurance on your behalf.
Coverage against loss as a result of forced entry into premises.
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The
termination of insurance coverage during the policy period. Flat
cancellation is the cancellation of a policy as of its effective
date, without any premium charge.
Notice to an insurer
that under the terms of a policy, a loss maybe covered.
The first or third
party. That is any person who asserts right of recovery.
Reimburses
you for damage to YOUR automobile sustained in a collision with
another car or with any other object, movable or fixed, (for
example, you accidentally backed into another object while
pulling out from a parking stall and causing damage to the bumper
and fender of your covered automobile).
This coverage waves your collision deductible if
you are hit by an negligent uninsured motorist. COMMON CARRIER LIABILITY
Coverage for transportation firms that must carry any customer's
goods so long as the customer is willing to pay. Examples
include trucking companies, bus lines, and airlines.
Provides
coverage for any direct and accidental loss of, or damage to, YOUR
covered automobile and its normal equipment, to include but not
limited to fire, theft or malicious mischief.
Coverage on an "all risks" basis for glass
breakage, subject to exclusions of war and fire.
Insurance issued to a creditor
(lender) to cover the life of a debtor (borrower) for an outstanding
loan.
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The company
refuses to accept the request for insurance coverage.
The amount of the
loss which the insured is responsible to pay before benefits from
the insurance company are payable. You may choose a higher
deductible to lower your premium.
A decrease in
value due to age, wear and tear, etc.
Health insurance that provides income payments to the insured
wage earner when income is interrupted or terminated because of
illness, sickness, or accident.
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Amendment to
the policy used to add or delete coverage. Also referred to as a
"rider."
Certain causes and
conditions, listed in the policy, which are not covered.
The date on
which the policy ends.
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insured dies. It does not include other amounts that may be paid
from insurance purchased with dividends or any policy riders.
A surety
bond, insurance policy or, when issued by an insurer, an indemnity
contract and any guaranty similar to the foregoing types, under
which loss is payable upon proof of occurrence of financial loss to
an insured claimant, obligee, or indemnitee.
Coverage for loss of or damage to a
building and/or contents due to fire.
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To be
eligible for the Good Drivers Discount all operators of the insured
vehicles must have been licensed for three or more year, have no
more than a one (1) point charge on their driving record and has not
been determined "at fault" in an accident resulting in bodily injury
or death to any person.
A period
(usually 31 days) after the premium due date, during which an
overdue premium may be paid without penalty. The policy remains in
force throughout this period.
An
option that permits the policy holder to buy additional stated
amounts of life insurance at stated times in the future without
evidence of insurability.
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A policy
that will pay specifies sums for medical expenses or treatments.
Health policies can offer many options and vary in their approaches
to coverage.
An
elective combination of coverages for the risks of owning a home.
Can include losses due to fire, burglary, vandalism, earthquake, and
other perils.
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A policy provision
in which the company agrees not to contest the validity of the
contract after it has been in force for a certain period of time,
usually two years.
The policyholder -
the person(s) protected in case of a loss or claim.
The insurance
company.
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Prepaid legal insurance coverage plan sold on a group basis.
This
coverage will pay for BODILY INJURY and/or PROPERTY DAMAGE to the
OTHER party for which you become legally responsible of an
automobile accident.
Coverage for all sums that the insured
becomes legally obligated to pay because of bodily injury or
property
damage, and sometimes other wrongs, to which an insurance policy
applies.
A policy that will pay a specified sum to
beneficiaries upon the death of the insured.
Maximum amount a
policy will pay either overall or under a particular coverage.
The amount which
can be borrowed at a specified rate of interest from the issuing
company by the policyholder, using the value of the policy as
collateral. In the event the policyholder dies with the debt
partially or fully unpaid, then the amount borrowed plus any
interest is deducted from the amount payable.
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Coverage for goods in transit and the vehicles of transportation
on waterways, land, and air.
The policyholder / applicant makes a false statement of
any material (important) fact on his/her application. For instance,
the policyholder provides false information regarding the location
where the vehicle is garaged.
Will pay
reasonable expenses incurred for necessary medical and /or funeral
services because of bodily injury caused by accident and sustained
by YOU OR ANY OTHER PERSON WHILE OCCUPYING A COVERED AUTOMOBILE.
Includes insurance against loss from damage done, directly or
indirectly by lightning, windstorm, tornado, earthquake or insurance
under an open policy indemnifying the producer of any motion
picture, television, theatrical, sport, or similar production,
event, or exhibition against loss by reason of the interruption,
postponement, or cancellation of such production, event, or
exhibition due to death, accidental injury, or sickness preventing
performers, directors, or other principals from commencing or
continuing their respective performance or duties; and any insurance
not included in any other classes and which is a proper subject of
insurance (California Insurance Code §120).
An incorrect
estimate of the insurance premium.
Life insurance that pays the balance of a
mortgage if the mortgagor (insured) dies.
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The cause of a
possible loss. For example, fire, theft, or hail.
The written contract
of insurance.
The maximum
amount a policy will pay, either overall or under a particular
coverage.
The amount of money an insurance company charges for insurance
coverage.
A a
policyholder contracts with a lender to pay the insurance premium on
his/her behalf. The policyholder agrees to repay the lender for the
cost of the premium, plus interest and fees.
When
the policy is terminated midterm by the insurance company, the
earned premium is calculated only for the period coverage was
provided. For example: an annual policy with premium of $1,000 is
cancelled after 40 days of coverage at the company's election. The
earned premium would be calculated as follows: 40/365 days X
$1,000=.110 X $1,000=$110.
Damage to
another person's property. The purpose of liability insurance
is to cover property damage to a third party resulting from the
negligent or intentional acts of an insured.
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An estimate of the
cost of insurance, based on information supplied to the insurance
company by the applicant.
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The cost
to repair or replace an insured item. Some insurance only pays the
actual cash or market value of the item at the time of the loss, not
what it would cost to fix or replace it. If you have personal
property replacement cost coverage, your insurance will pay the full
cost to repair an item or buy a new one once the repairs or
purchases have been made.
The full
cost to repair or replace the damaged property with no deduction for
depreciation, subject to policy limits and contract provisions.
The restoring
of a lapsed policy to full force and effect. The reinstatement may
be effective after the cancellation date, creating a lapse of
coverage. Some companies require evidence of insurability and
payment of past due premiums plus interest.
Usually known as an
endorsement, a rider is an amendment to the policy used to add or
delete coverage.
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When the policy is terminated
prior to the expiration date at the policyholder's request. Earned
premium charged would be more than the pro-rata earned premium.
Generally, the return premium would be approximately 90 percent of
the pro-rata return premium. However, the company may also establish
its own short-rate schedule.
A licensed
employee of a fire and casualty agent or broker who may act for the
agent or broker in some circumstances.
Coverage for property damage caused by
untimely discharge from an automatic sprinkler system.
An extra charge
applied by the insurer. For automobile insurance, a surcharge is
usually for accidents or moving violations.
To terminate or
cancel a life insurance policy before the maturity date. In the case
of a cash value policy, the policyholder may exercise one of the
nonforfeiture options at the time of surrender.
Includes insurance against loss through
damage or legal liability for damage, to property caused by the use
of teams or vehicles other than ships, boats, or railroad rolling
stock, whether by accident or collision or by explosion of engine,
tank, boiler, pipe, or tire of the vehicle, and insurance against
the theft of the whole or part of such vehicle (California Insurance
Code §115).
Coverage for losses if a land title is not
free and clear of defects that were unknown when the title insurance
was written.
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The process
of selecting applicants for insurance and classifying them according
to their degrees of insurability so that the appropriate premium
rates may be charged. The process includes rejection of unacceptable
risks.
Will pay you and your passengers for BODILY INJURY cause
by a negligent uninsured motorist, a hit-and-run driver, or by a
driver whose insurer is insolvent.
Will pay for damages to your automobile, set up to a
limit, when caused by a negligent uninsured motorist.
A period of
time set forth in a policy which must pass before some or all
coverages begin.
Coverage providing four types of benefits
(medical care, death, disability, and rehabilitation) for employee
job-related injuries or diseases as a matter of right (without
regard to fault).
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